David Lassman/The Post-Standard SYRACUSE MAYOR Stephanie Miner works Thursday in her City Hall office. She has proposed a city budget that includes no tax hike or layoffs, but she is calling on unions to sacrifice wages and benefits in new contracts.

By Stephanie Miner
“The day of reckoning is not coming; it has arrived.” When I spoke these words at my State of the City address Jan. 27, I knew the coming year would bring dire fiscal challenges. When I presented my budget Friday, I put it in the context of where we are going as a city — fiscal insolvency — unless fundamental dynamics are changed in Albany. The problem is simple: We spend more than we are taking in, and that spending is mandated by decisions and processes dictated by Albany.

This year, we will spend $13 million more than we will generate in revenue. We used $16 million in reserves to close the gap in 2010-2011 and project we will use $16 million in reserves in 2012-2013, leaving us with just $4 million in reserves. And we are not alone. Municipalities across New York state are facing similar or larger gaps. If we continue to deplete our fund balance, we will not only jeopardize our bond rating and our ability to borrow for capital expenditures (such as police cars and snow plows), we could face the fate of the city of Buffalo and Nassau County — bankruptcy and the implementation of a financial control board.

Our structural shortfall exists despite strict fiscal discipline. Since January 2010, we have reduced our workforce by 10 percent, cut overtime costs and instituted a wage freeze for non-bargaining unit employees. We are consolidating the purchasing department with Onondaga County and have merged our information technology management with the Syracuse City School District. And we plan to cut another $2.4 million from departmental expenditures.

Yet, it is the costs that we cannot control that are overtaking the city’s budget: pensions, interest arbitration awards and health care.

This year alone, our pension costs jumped 40 percent from $19.86 million to a projected $28.03 million. And there seems to be no end in sight to the astronomical growth of these bills. One expert predicts pension costs will more than double over the next five years. Moreover, our most expensive employees have the ability to have an arbitrator issue pay increases without consideration of Syracuse’s ability to pay for the increase. Indeed, both with pensions and binding interest arbitration, the city is simply sent the bill without any thought as to how or if we can afford to pay.

We need Albany to give us the ability to control our financial destiny: the restructuring of pension cost-sharing and changes to compulsory arbitration that include defining the ability of a municipality to pay. Our delegation understands the problem and has pledged to help us fight for reform. The difficult, but successful, state budget process illustrates that finding solutions to previously intractable problems is possible in Albany and I hope it will be with these issues too.

In addition, we need our unions to work with us. My budget proposal assumes no wage increases. While most of our unions are in negotiations, if concessions are not negotiated or interest arbitration awards are granted, this too will expedite the implementation of a financial control board.

The city’s health care costs have been rising at an annual rate of 9 percent. The cost of this insurance is largely uncontrollable due to the fact that, for the largest number of, and the most expensive employees, health insurance cost allocation is subject to binding arbitration. Those employees, for family coverage, pay only $27.69 a month.

Despite these challenges, there are some bright spots in this budget: $1 million for Say Yes to Education; funding for the most diverse police class in our history; and investments in technology for more efficient and better services. Yet, these investments and much more could be in jeopardy if we are not able to ultimately find ways to control our currently “uncontrollable” costs.

Stephanie Miner is mayor of Syracuse. She will answer questions about her budget plan during a live Q&A session on syracuse.com from 11 a.m. to noon Monday.